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26 Nov 2015

Beyond Capitalism: A Natural Progression?

Brian writes*

There is no doubt that the natural progression of Economic evolution has led us through varying orders. As Friedrich Hayek asserted in his work “Law, Legislation And Liberty”, our social structures or any structure above “the simplest atoms” is the result of an evolutionary process. This includes economic thought and structures. (Hayek 1973, 158) Capitalism is a jungle of competition. Full of rent-seekers that are defined as money-makers achieving their gains through political connections. A fairly common occurrence. (economist.com 2014)

Perhaps this is not an inherently negative manifestation of human civilization. Instead, it is simply a beacon of our current economic and social order that serves us in a capacity most befitting the natural progression of events and culture leading to here and now. (Hayek 1973, pg. 158) Douglass North corroborates the idea of this natural progression through his proposal of three social orders undergone (still being unraveled in some) by most national social orders. The first of which is referred to as the primitive social order in which we tended to our caves, sharpened stones and bashed each other’s skulls in for personal gain. (North 2006, pg. 4) The second of which commonly referred to as the “Limited Access Order” or “Natural State” includes the privileged rights of some to resources, often dominated by elites whom are incentivized to maintain order to keep this income flowing. There are many states still dwelling here. (North 2006, pg. 29) Finally, there is the order experienced by most of the Western world. This is the structure in which competition instead of elitist rents are used to maintain social order. Of-course open access societies are still inhabited with rent-seeking behavior. Just less of it. (North 2006, pg. 36-37) This evolution of human economic orders is of great intrigue. But, perhaps the real question of today should be the search for where we are headed. Are we evolving to inhabit our fourth economic order? Are we already questing to transcend the open access order marked by our capitalist drive for competitive dominance? Is there a last chopper out of Saigon?

The human species is one of perpetual advancement, change and evolution. It is said that we are on the verge of becoming a type 1 civilization in accordance with the Kardashev scale. This would indicate a great leap in scientifically founded technological advancement. Especially centered around sustainable and renewable energy resources. (Wikipedia.com) Perhaps not an indicator of a change in economic ordering in and of its self, but a definite reinforcement of the idea of a perpetual evolution in the development of new systems and better orders for the sake of our survival and advancement. A recent Time article referenced the increasing trend of Artificial Intelligence and technology that is consuming our jobs. Predicting that this is a trend that will continue into the foreseeable future. As this AI improves, prices will be driven down and a wider range of people will have access to products and services. At the same time, new jobs will continue to unravel. (Time.com) It is high time we considered how technological evolution will shape and change humanity’s economic orders as they stand. One of these potential order evolutions has been proposed by a concept dubbed The Venus Project. This proposes the possibility of a resource-based economy in which resources would be considered “the common heritage of all inhabitants”. Though an unfeasible alternative at first glance considering the basic concept of scarcity. It is an economic system entirely reliant on a high level of technological advancement as humanity’s savior. An advancement we are experiencing now. (Thevenusproject.com) Perhaps this order is one of many possible future progressions in economic evolution.

Bottom Line: In a world still riddled with violence, scarcity, rent-seeking and a host of inefficiencies and shortcomings… perhaps it is high time we consider where we are going instead of what is trapping us in an order that is arguably nearing a date for withdrawal of our occupation.
* Please comment on these posts from my growth & development economics students, to help them with unclear analysis, other perspectives, data sources, etc.

1 comment:

Very thought provoking post, Brian! However, I have two suggestions, one on structure and one on content.

First, your post could benefit from clarifying the exact connection between all these developments that you identify as instances of a "beyond capitalism" lurking out there and capitalism as it today. Why do we need to envision a wholly new era of economic life to accommodate developments such as the advancement of AI or becoming able to capture the entire energy the Earth receives from the Sun? (type I on the Kardashev scale - by the way, I had to look that up - maybe next time insert a short explanation in your post?) Capitalism already adapted so many times to so many changes arguably without losing the essential features of competition and the price mechanism... why would the next stage of (hopefully) sustainable, AI-helped living require losing such features? Personally, I'd say you're probably right - but you need to spell out why.

Secondly, speaking on the substance of your argument, I'm not sure that all these developments point towards the same direction of a "fourth economic order". AI taking over our boring (and even not so boring) jobs might actually drive up the prices (or at least make us impoverished by reducing our possibilities of earning)... and in any case, in order for the "fourth economic order" to arise, massive institutional changes will have to happen. See http://www.aguanomics.com/2014/10/the-middle-class-is-dead-long-live.html It's hardly a "natural progression" as you call it - it may as well never happen if not enough people take the right decisions at the right time.

Good luck in your future posts! (and in the future, when some super-clever and almost funny AI machine will take our jobs as guest blogger and commenter :D )